With respect to the gross up and tax creditprocedures applicable to dividends from taxableCanadian corporations, which of the followingstatements is NOT correct?1. The gross up is intended to adjust the taxableamount of the dividend to the pre-tax amountthat was required at the corporate level in orderto pay the dividend.2. The federal dividend tax credit is the sameregardless of corporation it is received from.3.The amount of the gross up depends onwhether the dividend is eligible or non-eligible.4. The dividend tax credit is intended tocompensate the shareholder for the taxes thatwere paid at the corporate level

The meaning of the gross dividend is that it is the part of the company's earnings that is paid to…

Answered: With respect to the gross up and tax…

With respect to the gross up and tax credit procedures applicable to dividends from taxable Canadian corporations, which of the following statements is NOT correct?

SWFT Comprehensive Vol 2020

43rd Edition

ISBN:9780357391723

Author:Maloney

Publisher:Maloney

Chapter17: Corporations: Introduction And Operating Rules

Section: Chapter Questions

Problem 8BCRQ

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Question

With respect to the gross up and tax credit
procedures applicable to dividends from taxable
Canadian corporations, which of the following
statements is NOT correct?
1. The gross up is intended to adjust the taxable
amount of the dividend to the pre-tax amount
that was required at the corporate level in order
to pay the dividend.
2. The federal dividend tax credit is the same
regardless of corporation it is received from.
3.The amount of the gross up depends on
whether the dividend is eligible or non-eligible.
4. The dividend tax credit is intended to
compensate the shareholder for the taxes that
were paid at the corporate level

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